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A. J. Johnson

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Use of Residual Receipts to Offset HAP Payments (Notice H-2012-14)

August 22, 2012

HUD Notice H-2012-14 was published on August 2, 2012 requiring the use of “New Regulation” Section 8 Housing Assistance Payments (HAP) Contracts residual receipts to offset project-based Section 8 HAP payments. This Notice applies to Section 8 New Construction/Substantial Rehabilitation…

HUD Eliminates Two Income Exclusions and Adds Others

August 13, 2012

HUD Amends List of Income Exclusions On July 24, 2012, HUD published in the Federal Register additional types of income that are excluded from income for purposes of determining eligibility for HUD housing programs. These exclusions also apply to…

A. J. Johnson Consulting to Introduce Pre-MOR Review Service

August 12, 2012

A. J. Johnson Consulting Services will begin offering a new service in January 2013. This service will be conducting pre-MOR reviews for properties with project-based Section 8 assistance. Those properties subject to HUD and Contract Administrator review will benefit from…

IRS Proposed Rule on Utility Allowances

August 11, 2012

The IRS has published a proposed regulation that will amend the IRS utility allowance regulation 1.42-10. This regulation outlines requirements relative to utility allowances on low-income housing tax credit buildings. The proposed regulation updates 1.42-10 to clarify that utility costs…

The Importance of Cost Segregation Studies

July 23, 2012

Cost segregation is the process of examining all the physical components of a property and classifying them based on their life expectancy for tax purposes. A major tax court case (AmeriSouth v. Commissioner (TC Memo 2012-67), March 2012) has resulted…

Must a Tax Credit Unit be a Tenant’s Only Residence?

July 1, 2012

Must a Tax Credit Unit be a Tenant’s Only Residence? I get asked the question above fairly often, and I always reply, “yes,” without ever providing a regulatory or statutory source for that answer. So, in order to ensure…

State Registered Lifetime Sex Offenders in Federally Assisted Housing

June 30, 2012

On June 11, 2012, HUD published Notice H 2012-11, which clarifies and supercedes Notice H 2009-11. The Notice reiterates the responsibilities of owners and agents of HUD-assisted properties relative to the rental of housing to lifetime registered sex offenders. …

Maryland Appeals Court Deems Pit Bulls Inherently Dangerous

June 23, 2012

In Tracey v. Solesky, No. 53, September Term 2012,the Maryland Court of Appeals has determined that showing that the owner of a dog or the landlord of a property knew that a dog is at least part pit bull is…

HUD Proposed Rule on Project-Based and Tenant-Based Vouchers

June 4, 2012

On May 15, 2012, HUD published a Proposed Rule on the implementation of the HERA 2008 changes to the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher Programs. The proposed rule may be found in the Federal Register, Vol.…

Dealing with Bed Bug Infestation

May 29, 2012

Bedbugs: Addressing and Preventing Outbreaks in Tax Credit Properties By A. J. Johnson Outbreaks of bedbug infestation in apartments are increasing at an alarming rate in most metropolitan areas of the country, and low-income housing tax credit properties are…

HUD Publishes Formal Guidance on Infestation Control

May 29, 2012

On April 23, 2012, HUD published Notice H 2012-5, “Guidelines on Addressing Infestations in HUD insured and Assisted Multifamily Housing.” This guidance formalizes that in cases of infestation, owner priority should be the establishment of an Integrated Pest Management Plan…

Section 538 Web Conferences

May 27, 2012

In August and November 2012, the United Stated States Department of Agriculture will hold a series of teleconference calls and/or web conferences regarding the Section 538 Guaranteed Loan Program. These discussions are open to the public and will cover a…

Indiana Getting Tougher for Rules Infractions

June 1, 2011

Developers and developer team members who fall into noncompliance with LIHTC program rules will face tougher penalties under proposed rules issued by the Indiana Housing & Community Development Authority (IHCDA). Under the proposal, which is contained in the draft 2012-2013…

High Credit Demand Leads Massachusetts to Limit Applications

June 1, 2011

The Massachusetts Department of Housing & Community Development (MDHCD) is proposing to limit the number of applications a sponsor can submit and an increase in minimum project sizes for 2011. Developer demand for tax credits in 2010 exceeded their availability…

Michigan Proposing New Rules to Encourage LIHTC Development

June 1, 2011

The Michigan State Housing Development Authority (MSHDA) has proposed changes to its rules to make projects more feasible for LIHTC developers and to encourage new developers to participate in the program. A major change would eliminate the requirement that investors…

Maryland Loan Program Provides Financing for Energy Upgrades

June 1, 2011

The Maryland Department of Housing & Community Development (MDHCD) has established a loan program to finance improvements to energy systems for multifamily developments, single-family homes, and businesses. The program is called be SMART (Save Money and Resources Today), and if…

House 2012 Funding Bill Cuts RD Across the Board

June 1, 2011

The House passed the 2012 agriculture appropriations bill (H.R. 2112) on June 16 in which virtually all discretionary spending was cut. The effect of the amendment will result in a reduction in funding for the Section 515 Program of $457,080,…

Draft Legislation Would Transfer Rural Housing Service to HUD

June 1, 2011

The House Financial Services Committee has released draft legislation that would transfer the Rural Housing Service to HUD. The proposed legislation would create a new position at HUD of deputy assistant secretary for rural housing. The new department would be…

HUD Relaxes Restrictions on ex-Criminals in Public Housing

June 1, 2011

HUD Secretary Shaun Donovan has issued a letter to public housing agencies clarifying that ex-criminals may live in public housing under certain conditions. HUD outlines only two explicit circumstances under which ex-criminals are prohibited from public housing or issuance of…

HUD Raises Civil Penalty for Failure to Disclose Lead-Based Paint Hazards

June 1, 2011

HUD has raised the maximum penalty for failure to disclose lead-based paint hazards from $11,000 to $16,000. This is the first increase since 1996. A final rule increasing the penalty goes into effect on July 22, 2011.

Congress Unveils New Section 8 Proposals

June 1, 2011

The House Housing Subcommittee has released a modified version of an earlier Section 8 Voucher Reform proposal, and chances for passage this year look to have improved over what they were earlier. The bill, entitled the Section 8 Savings Act,…

HUD Provides Guidance Regarding The Counting Of Cents In Income

June 1, 2011

The Department of Housing & Urban Development recently issued a clarification regarding whether or not to count the “cents” that show up as part of the gross amount of Social Security income on Social Security Award Letters. The clarification was…

HUD Streamlining Inspection & Subsidy Layering Review of LIHTC Properties

June 1, 2011

HUD is launching two pilot programs to test the feasibility of streamlined physical inspections and subsidy layering reviews for projects with low-income housing tax credits and rental assistance. The pilot programs are the result of an interagency task force involving…

IRS Hardens Position on Loss of Credits for Violation of Rent Limits Due to Utility Allowance Errors

June 1, 2011

During a meeting of the National Council of State Housing Finance Agencies (NCSHA) in June, an IRS official made it clear that violation of Section 42 gross rent limits because of a utility allowance error will result in a loss…

New York Congressman Introduces Bill Excluding Military Housing Allowance from Income for LIHTC Properties

June 1, 2011

On June 2, 2011, Congressman Bill Owens of New York introduced legislation that would exclude the military Basic Allowance for Housing (BAH) from income for eligibility purposes for properties operating under the Section 42 program. Currently, only a small number…

HUD Makes it Clear that LIHTC Compliance Monitoring Fees are Includable in Section 8 Budgets

June 1, 2011

In a May 31, 2011 memo to field offices, HUD reiterated, “Projects with low income housing tax credits may include in their budgets the cost of the annual compliance reports (a.k.a. state allocating agency’s compliance and asset monitoring fees) that…

No More Paper Checks for Federal Benefits

April 1, 2011

Paper checks are being phased out for all federal benefit payments. Beginning May 1, 2011, anyone newly applying for Social Security, Veterans benefits or any other federal benefit, will need to choose an electronic payment method – paper checks will…

House Financial Services Committee Discussion Bodes Well for Multifamily Housing

April 1, 2011

At a March 1, 2011 hearing on HUD’s fiscal 2012 budget, there was bipartisan agreement on the need to preserve affordable rental housing. While discussion centered generally on budget cutting, Committee Chairman Spencer Bacchus (R-AL) noted the bipartisan agreement among…

Mississippi Requiring Community Services for LIHTC Projects

April 1, 2011

The Mississippi Home Corporation (MHC) is requiring all 2011 low-income housing tax credit projects to provide tenant services not usually offered in affordable housing. The requirement, which is part of the Agency’s Qualified Allocation Plan (QAP) requires that projects commit…

Ohio Considering New Requirements for Tax Credit Market Studies

April 1, 2011

The Ohio Housing Finance Agency (OHFA) is considering the adoption of new requirements for tax credit project market studies. The changes would include new procedures that will demand more comprehensive conclusions regarding project feasibility. Analysts may also be required to…

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